What do firms in a cartel strive to achieve together?

Firms within a cartel aim to coordinate their activities to maximize joint profits, which typically involves restricting output. By collectively setting limits on production, cartel members can create artificial scarcity in the market. This reduction in supply allows them to raise prices higher than what would occur in a competitive market. This collaborative approach helps the members secure larger profits than they would achieve by competing against each other, leading to higher prices and, ultimately, increased profitability for all parties involved.

In contrast, attempting to lower individual firm profits would contradict the fundamental goal of a cartel. Strict competition among members would undermine the very purpose of forming a cartel, which is to reduce competition. Lastly, pursuing free market pricing runs counter to the essence of a cartel, as members seek to deviate from market-driven prices to achieve their own controlled pricing strategy.